Setting up a policy

There are just three steps to setting up an Ill Health Early Retirement Benefit policy:

1.  Decide to de-risk this liability

2.  Quantify the cost

If the scheme is defined benefit, either:

  • The pension scheme’s actuary can calculate the strain cost on the pension scheme, or
  • We can use our strain cost assumption tools to analyse scheme information and calculate an amount that targets the expected strain cost.

If the scheme is defined contribution

  • Our scheme underwriters can calculate the costs by assessing the membership profile and claims history.

The policy can insure the estimated cost or just part of it.

3.  Policy starts

Once you accept our quote, we’ll let you know what information is needed to start the policy and confirm a start date.

Managing your policy

Annual reviews

The policy sum assured is re-calculated annually and premiums are adjusted accordingly, taking into account of any changes such as membership, benefit levels and claims experience.


In the event of a claim the lump sum benefit paid will be the amount agreed between you and us at the policy start date or, if later, the last annual renewal date before the member first met the policy definition of permanent incapacity.

The benefit paid will not exactly match the strain cost arising in a defined benefit pension scheme.